A Gen-Xer fell behind on savings, changed his investment strategy, and now plans to retire early. 2 books changed his mentality.
Courtest of Brannon Potts
- Brannon Potts fell behind on retirement savings, but two books helped him turn his finances around.
- He says that 'The Millionaire Next Door' and 'Rich Dad Poor Dad' changed his mentality.
- The books encouraged him to change his strategy and start investing in real estate.
Brannon Potts expects to expand his real-estate portfolio from 12 doors to 20 within the next five years.
At that point, he'll feel comfortable walking away from his property management company and enjoying an early retirement.
The 53-year-old, who builds his rental properties to earn better returns, has put himself in an excellent financial position over the last five years but, "don't think I haven't made mistakes in my life," he told Business Insider.
"I have made some really bad ones early on. I just got it together probably in my 40s, and I feel like I really got it together well, but we didn't do well because we weren't taught."
Like most Gen Xers, Potts didn't learn basic personal finance lessons in school, such as the importance of putting your money to work — and starting early. After years of working in banking and finance, he found himself behind on long-term savings.
"I was in my 40s and I hadn't really gotten, in earnest, to saving for retirement," he said. "And I knew that the power of time was now a liability for me."
Two money books "changed my mentality," said the Fort Worth-based investor, and ultimately led him to real estate investing and on a path to financial freedom.
"The Millionaire Next Door" by Thomas J. Stanley and William D. Danko
"If you haven't read it, you need to read it," said Potts. "It's an old book written in '96. I'm telling you, it is eye-opening."
The book lets you in on what the average millionaire looks like — the author reveals that most aren't flashy and choose, instead, to live and spend modestly — and identifies commonalities and traits among people who have built wealth.
"Rich Dad Poor Dad" by Robert Kiyosaki
Robert Kiyosaki's 1997 book, which Potts calls "a classic," is a favorite among real-estate investors.
The author grew up with two father figures: "poor dad," his real father who died with bills to pay, and "rich dad," who started with little before becoming a wealthy man. Both fathers were successful in their careers and earned substantial incomes, but one always struggled financially.
Kiyosaki noticed fundamental differences in the way "rich dad" and "poor dad" thought, spoke, and acted. Throughout his book, he offers timeless lessons he learned from "rich dad," most notably, how much money you keep is more important than how much you make and focus on acquiring assets, not liabilities.
It taught Potts the importance of holding his money "accountable," he said. "That's what people that reach financial freedom do. If you treat your money well, it'll come back with friends. If you treat your money poorly, it'll leave and go to somebody else who treats it better. So, I want to treat my money well. I want to hold it accountable to making good returns."